As His Honour Martin J. observed, the real applicant before him was the
Territory Insurance Office which was empowered to make the
application
pursuant to s. 40 of the Motor Accidents Compensation Act. That section
provides (s. 40(1)(a) and (b)) that the Office
may take over during such
period as it thinks fit the conduct on behalf of a person referred to in s.
6(1) of any proceedings taken
or had to enforce the claim against him. S.
6(1) refers, inter alia, to a person liable to pay damages in respect of
injury to any
person as the result of an accident that occurred in the
Territory when such person was in control of a motor vehicle other than
a
"Territory motor vehicle", or in any place whether or not in the Territory
when such person was in control of a Territory motor
vehicle. "Territory
motor vehicle" is extensively defined in s. 4. I think it appropriate to
point out that the evidence before
us establishes only that the accident
occurred in the Territory, that the defendant had a Darwin address but was
believed to be "around
the Katherine area" until about 1986, that he had a
Queensland licence and might now be in New South Wales. Whether he was a
"resident
of the Northern Territory" at the date of the accident (see s.
4(b)(1)) or whether the vehicle he was driving at the time came within
the
definition of a "Territory motor vehicle" might have been difficult to
establish on the material before His Honour and before
us. But this point is
not taken by the Territory Insurance Office and indeed I note that in the
proceedings before Martin J. counsel
for that Office expressly said that
"there's no issue ... that Territory
Insurance Office is liable to indemnify the
defendant
in respect of the plaintiff's claim ...
there won't be any point taken about that aspect
of the matter."
6. I propose therefore
to refer hereafter to the Territory Insurance Office
as "the applicant".
7. The applicant takes two objections to the order for
substituted service:-
1. that the evidence does not establish
that a case for the application of rule 6.09 was
made out.
2. that even if such a case were made
out the order should not have provided that the
Writ be served on the applicant.
8. As to the first objection it is necessary to set out rule 6.09(1). That
rule states:-
"Where for any reason it is impracticable
to serve a document in the manner required by
this chapter, the Court may order that, instead
of service, such steps be
taken as it specifies
for the purpose of bringing the document to the
notice of the person to be served".
9. That rule replaced
the earlier O.10 r.2(3) which was in the following
form:-
"(3) If it is made to appear to the
Court or a Judge that the plaintiff
is from any
cause unable to effect prompt personal service,
the Court or the Judge may make such order for
substituted or
other service, or for the
substitution for service of notice by
advertisement or otherwise as is just."
10. That rule in turn
was adopted from the original English rule which can be
found first in rule 5 of the Rules of Procedure in the Schedule to the Supreme
Court of Judicature Act 1873 and then as O.9 r.2 in the Schedule to the
amending Act of 1875, and now (as amended) in O. 65 r. 4.
11. The rule has a long history, for its original terms were not altered in
England until 1962. The phrase "is from any cause unable
to effect prompt
personal service" was then replaced by the phrase "is impracticable for any
reason to serve that document personally".
That again was altered in 1979 to
read, "is impracticable for any reason to serve that document in the manner
prescribed." With
some minor differences the same phraseology appears in
Northern Territory Rule 6.09, Victorian Rule 6.10 and New South Wales Rule
Pt.
9 r. 10.
12. Goulding J. in Re Conan Doyle's Will Trusts (1971) 2 All ER 1377 was of
the opinion that the change in wording made a change in practice.
"Formerly it was sufficient to show that
prompt personal
service could not be effected and
then the court has a discretion to order
substituted service. Mere lack of promptness as
such is not, in my judgment, sufficient under the
present rule; it has to be shown that personal
service is for one reason
or another
impracticable." (p 1379).
13. His Honour was successful in getting the editors of the White Practice to
alter their
original comment that the change in wording "makes no material
change in the law or practice relating to substituted service" (1970
Edn.
65/4/1) to the comment that the wording "does make a change in the former
practice" (e.g. 1973 Ed. 65/4/1 and Editions thereafter).
He does not seem to
have had the same success with the Editors of the fourth edition of Halsbury
who actually cite Re Conan Doyle's
Will Trusts as authority for the
proposition that the change of wording has not changed the practice. See Vol
37, para 153 note
3. As a matter of strict literary construction Goulding J.
must be correct, but, with respect, he has overlooked the historical
context
in which the change was made; and it would seem that the learned editors of
the White Book were correct in their original
comment. Professor Williams,
whose expertise in this field is rightly recognised, considers that the test
is the same under the
new rule as under the old. See Civil Procedure -
Victoria p 2497. He gives the convincing reason that the cases under the old
rule
had established that to show inability to effect prompt personal service
the applicant had to show a "practical impossibility" of
actual service. That
is the phrase used in the leading case of Porter v Freudenberg (1915) 1 KB 857
at 889. So interpreted, there seems nothing to differentiate between the
phrase "unable to effect prompt personal service" and the
phrase
"impracticable to serve", even if the word "prompt" is used only in the
earlier rule. In Foxe v Brown [1984] HCA 69; (1984) 58 ALR 542 and 547 Mason J. (as he then
was), speaking of the standard of diligence or effort required of a plaintiff
in seeking out a defendant
in a case where substituted service is sought,
says:-
" That standard, however it is expressed,
is one of reasonableness so
as to show a
practical impossibility of personal service"
(Emphasis added).
14. It would seem therefore that the later rule
is no more than a more
accurate statement of the older rule as interpreted by the courts. That is the
basis upon which both counsel
proceeded and should, in my view, be the basis
upon which this Court should proceed.
15. The locus classicus from which any examination
of the rules of
substituted service should commence is Porter v Freudenberg (1915) 1 KB 857.
There Lord Reading C.J. delivered the judgment of a very strong Court of
Appeal (Lord Reading C.J., Lord Cozens-Hardy M.R., Buckley,
Kennedy, Swinfen
Eady, Phillimore and Pickford L.JJ.). The reason for the assembly of no less
than seven Justices of Appeal was
to determine whether or to what extent an
alien enemy could sue or be sued in the King's Courts; but the case also and
necessarily
involved a question of substituted service on a defendant who
resided in Germany at a time when England was at war with that country.
In
the course of delivering the unanimous judgment of the Court of Appeal Lord
Reading C.J. said at p 888:-
" In order that substituted
service may
be permitted it must be clearly shown that the
plaintiff is in fact unable to effect personal
service and that
the writ is likely to reach the
defendant or to come to his knowledge if the
method of substituted service which is asked for
by the plaintiff is adopted."
16. Mr Tippett, for the applicant, submits that the present case does not
fulfil those requirements.
He argues that Martin J.'s observation that
"extensive inquiries" had been made to locate the defendant are not borne out
by the
material placed before him, and that His Honour had somewhat too
readily adopted that expression from its appearance twice in the
affidavits
filed on behalf of the plaintiff.
17. The first time the expression appears is in the affidavit of Mr Burke, a
Legal
Officer of the plaintiff's solicitors, sworn on 17 February 1988. He
deposes that he asked a firm of commercial agents "to make
extensive
inquiries" in the Northern Territory and Queensland as to the defendant's
whereabouts. In a later affidavit sworn 20 May
1988 he says that he asked
those agents to make further inquiries. In this later affidavit he also sets
out that
" the file in
this matter reveals to me
that since the within Writ was taken out
extensive inquiries have been made in the
Northern Territory
of Australia as to the
whereabouts of Michael John O'Neil. The only
results from those inquiries have been various
rumours
which have each been investigated but
have failed to reveal the whereabouts of Michael
John O'Neil".
18. In fact the inquiries
indicated that the defendant did not reside at a
Darwin address which the plaintiff had of the defendant; that he was resident
in
the Katherine area. Process servers were employed to locate the defendant
in that area but, although at first they thought he was
in that area,
ultimately their inquiries indicated that he was not. Mr Jones, another legal
officer employed by the plaintiff's
solicitors deposed to these matters and
also to the fact that another firm of process servers had made inquiries at a
particular
hotel in Katherine where it was believed the defendant had been
seen but they had been unable to obtain any information. From information
made available to him, including Police Accident Reports, he believed that the
defendant may well be resident in Queensland since
he had a Queensland drivers
licence; but in a later affidavit Mr Jones deposed that he did not have a firm
conviction that the defendant
resided in Queensland and that "he might be
anywhere". This last remark was presumably prompted by some information, the
source
of which is not revealed, that the defendant was an alcoholic. That
appears in the further affidavit of Mr Burke of 20 May 1988
where it is also
stated that inquiries have revealed that the defendant may be in a Mental
Institution in New South Wales. Mr Burke
adds that inquiries made in New
South Wales have failed to reveal the whereabouts of the defendant and that
the Australian Legal
Aid Office has been advised that, in any event, it is not
the practice nor policy of Mental Institutes in New South Wales to advise
as
to the identity of patients in their institutions. Finally he deposes that he
believes that no additional or further inquiries
would have any reasonable
prospect of success.
19. Now there would seem to be some matters that are conjectural in these
affidavits,
but this much is shown that, apart from the plaintiff's
solicitors' own inquiries, two firms of private enquiry agents and one firm
of
commercial agents (assuming there to be some difference in these descriptions
in this context), have failed to locate the defendant,
that nearly nine years
have elapsed and no fixed place of abode of the defendant can be found. Some
areas of investigation seem to
have been overlooked (e.g., Electoral Rolls),
but I would not be prepared to disagree with Martin J. that extensive
inquiries had
been made. While an Appeal Court is in as good a position as the
trial judge to draw inferences of fact from the established evidence
(Warren v
Coombs [1979] HCA 9; (1979) 142 CLR 531) that is not to say that one should undertake that
exercise on an application for leave to appeal rather than appeal simpliciter,
if there is material upon which the trial judge could come to his conclusion,
and where the argument is one of semantics as to what
constitutes "extensive
inquiries". In the circumstances of this case I would not be prepared to
consider that a proper basis for
granting leave to appeal in an interlocutory
matter had been made out on this ground.
20. The second argument is that there is no
justification for a form of
substituted service which involves service upon the applicant. In putting
this argument Mr Tippett invites
us to overrule certain authorities of this
court and to refuse to follow certain cases in other hierarchies.
21. What might be regarded
as a rule of convenience has developed in this
court and in certain other courts that, if a judgment obtained against the
defendant
in a motor accident case may ultimately be enforced against his
third party insurer, then, provided all proper inquiries to find
the defendant
have been unsuccessful, an order for substituted service upon his insurer may
be made. The authority for this in the
Northern Territory is to be found
first in Lawford v Hosth (1974) 5 ALR 57 where Forster J. (as he then was)
traces the origin of the concept from an observation of Goddard L.J. in Murfin
v Ashbridge and
Martin (1941) 1 All ER 231 at 235 (albeit made very
cautiously); to a somewhat stronger observation by Diplock L.J. in Gurtner v
Circuit (1968) 2 QB 587 at 605; to a positive acceptance in Queensland by
Wanstall J. in Kevin v Schmeisze (1964) Q WN 51; followed by Lucas J. in
Edmonds v James (No. 2) (1968) Q WN 46; the latter case then being regarded by
Zelling J. in Hodge v Club Motor Insurance(1974) 7 SAS R 86 at 102 as a
"robust but common-sense approach".
22. Forster J. followed the Queensland cases and found this justification:-
"
The principles underlying these cases
are, first, that the real defendant in motor
accident cases is the third party insurer
of the
defendant (McCann v Parsons [1954] HCA 70; (1954) 93 CLR 418)
and, second, that if a judgment obtained against
the defendant may ultimately be enforced against
the defendant's insurer
then, provided all proper
inquiries to find the defendant have been
unsuccessful, an order for substituted service
upon
the insurer may be made whether or not the
policy was entered into interstate."
23. His Honour refused to follow a decision to
the opposite effect Randall v
Murphy (1967) Tas SR (NC) 262, describing the report as exiguous; which indeed
it is, being no more
than a case note. However the reason is stated clearly
enough that the order for substituted service on the insurer must be set
aside
because there was no likelihood shown in that case that the service ordered
would come to the knowledge of the defendant.
24.
I think it must be frankly conceded that the approach adopted by Forster
J. and by the Queensland judges is a deviation from the
directives laid down
in Porter v Freudenberg insofar as service on the insurer does not, if nothing
more is shown, necessarily mean
that the writ is thereby likely to come to the
knowledge of the defendant. There will obviously be cases - and the present
case is
an example - where the insurer will have no better means of knowing
the whereabouts of the defendant than the plaintiff has. But
there is a plain
injustice if a plaintiff who has done all he could to find the defendant, is
deprived of a remedy although there
exists a clear legislative policy through
compulsory third party insurance that, in motor vehicle accidents, a
plaintiff, who may
properly establish liability against the driver of another
vehicle and who is not outside certain exceptions provided by legislation,
such as limitation periods, should have a remedy. That, after all, is what
owners of motor vehicles pay for and that should be their
reasonable
expectation. If there is to be a detriment because of the disappearance of
the allegedly negligent driver that detriment
should in fairness fall on the
insurer who has received the benefit of the premiums under the scheme:
provided that the plaintiff
first plays his part in making due and proper
inquiries. I am not persuaded that the potential injustice complained of by
the applicant
in this case (see paragraph 9 of the affidavit of Mr Stewart
sworn on behalf of the applicant) outweighs the actual injustice suffered
by
the plaintiff if he cannot proceed because the defendant cannot be found. The
applicant can take over the conduct of the proceedings
on behalf of the
defendant (s. 40(1)(b)), and can still put the plaintiff to proof and dispute
both liability and quantum. It may
suffer a tactical disadvantage, (although
one suspects that the absence of a possibly unreliable defendant may not
always be a calamity),
but it can still proceed.
25. The decision in Lawford v Hosth supra was followed in the Northern
Territory by Ward J. in Hunt v
Molk (1975) 11 ALR 288, and by Nader J. in
Nicholls v Thiel (1983) 25 NTR 11. In neither of those cases could it be said
that the order providing substituted service on the third party insurer made
it likely
that the writ would reach the defendant or come to his knowledge.
Gallop J. in Munkarra v Fischer (1980) 5 NTR 3 at 6 referred to the suggestion
that there was a "special situation relating to motor vehicle accidents and
orders for substituted
service" but did not find it necessary to come to any
decided view. Gillard J. in Bradvica v Radulovic [1975] VicRp 42; (1975) VR 434 may be said to
have given some guarded approval to the suggestion when he said at p 440:-
" Having regard to the views stated
by
Diplock L.J. in Gurtner's case it may be that
substituted service on the Incorporated Nominal
Defendant could be justifiably
ordered. It is
not necessary, however, to come to a concluded
view about this."
26. The decisions in Lawford v Hosth and
Hunt v Molkwere followed by Master
Allen in the Supreme Court of NSW in Chappell v Coyle (1984) 3 NSWLR 557 who
observed:-
" Those decisions constitute, in my
judgment, persuasive authority that, in the
exceptional circumstances
that the defendant is
fully covered by statutory insurance, that the
insurer has the right to conduct any defence on
behalf
of the defendant and that recovery in
respect of any judgment obtained can be enforced
against the insurer, it is proper to
order
substituted service upon the insurer
notwithstanding that there is no likelihood that
the defendant personally will
become aware of the
proceedings."
27. That decision, however, was reversed on appeal by Yeldham J. (Chappell v
Coyle (1985) 2 NSWLR 73).
28. His Honour reviewed the cases already mentioned and the process whereby
the sort of order made by Master Allen came to be considered
appropriate by
some judges in the circumstances the Master has set out. His Honour
considered this to be an incorrect procedure
based on insubstantial
foundations and contrary to the principle propounded in Porter v Freudenberg
that it must be clearly shown
that the writ is likely to reach the defendant
or come to his knowledge if the method of substituted service sought is
adopted.
He drew attention to the express requirement in the New South Wales
rules (as in the Northern Territory and Victorian rules) that
the Court may
order that, instead of service, such steps be taken as it specifies "for the
purpose of bringing the document to the
notice of the person to be served".
He pointed out that the relevant Queensland rule, in force when the decisions
of Kevin v Schmeisze
and Edmonds v James were handed down, did not contain
that phrase, but allowed the court to "make such order for substituted or
other
service ... as is just". Nevertheless the Queensland decisions were
made under substantially the same rule as prevailed in England
when Porter v
Freudenberg was decided; so the Queensland judges were still neglecting the
principle there set out that it must be
shown that the writ was likely to
reach the defendant or come to his knowledge. If, as seems to be the case,
the new rule is no
more than an attempt to state the old with greater clarity,
the addition of the words "for the purpose of bringing the document to
the
notice of the person to be served" is again no more than enshrining the
general principles of Porter v Freudenberg; but the exceptional
case developed
under the earlier rule might still obtain under the later restatement. Indeed
the phrase "for the purpose of" may
be somewhat less strict than the phrase
"likely to reach". At least it contemplates that the purpose may not be
achieved.
29. In
Chappell v Coyle Yeldham J. at p 85 acknowledges that
"the reality of the situation is that the
conduct of the proceedings
is undertaken by such
insurer, who is liable to indemnify its insured
against any liability he may have, and who, if
necessary,
can be compelled by the plaintiff to
pay the amount of any judgment. Cases such
McCann v Parsons and others mentioned by Gillard
J. in Bradvica v Radulovic (at 445) emphasize that
in some circumstances the court should have
regard to the realities of
the situation".
His Honour then continued
"But I do not think that such 'realities'
would justify the court in making an
order for
substituted service in circumstances not
permitted by the relevant rule of court or else
contrary to its obvious
spirit and intendment".
30. I acknowledge the strict logic of His Honour's reasoning. But I would
not, with respect, think it necessarily
within the spirit and intendment of
the rules to deprive a plaintiff of relief in the exceptional case, where all
that stands between
him and a legislative scheme expressly devised to give him
a remedy if the opposite party cannot be found, is the very fact that
the
opposite party cannot be found. In those circumstances and on the basis of
the reasoning in such cases as Lawford v Hosth it
should be open to the Court
to specify service on the insurer "for the purpose of bringing the document to
the notice of the person
to be served" because that is all that is left that
can reasonably be done, and although the purpose may not be achieved.
31. It
seems that Foxe v Brown, which was decided shortly before Chappell v
Coyle, was not cited to His Honour Yeldham J. in the latter
case. In Foxe v
Brown Mason J., as he then was, seems to have accepted the existence of the
exceptional case of service on a third
party insurer even though there was
little likelihood of the writ thereby coming to the knowledge of the
defendant. His Honour says
at pp 546-547:-
" The second issue relates to the order
for substituted service of the writ and statement
of claim. In
general, for an order for
substituted service to be made it must be shown:
(a) that the plaintiff, using reasonable effort,
is unable to effect personal service; and (b)
that the method of substituted service requested
is one which is likely to
cause the writ to come
to the knowledge of the defendant (Porter v
Freudenberg (1915) 1 KB 857). However, in a
number of cases substituted service of a writ has
been ordered on a third party motor vehicle
insurer against
whom a judgment obtained may
ultimately be enforced even though there was
apparently little likelihood of the writ thereby
coming to the knowledge of the defendant (eg
Kevin v Schmeisze (1964) QWN 51 and Lawford v
Hosth (1974) 5 ALR 57). In Lawford v Hosth
Forster J. (at pp 58-9) identified the principles
underlying these cases as being: ' ... first,
that
the real defendant in motor accident cases
is the third party insurer of the defendant
(McCann v Parsons [1954] HCA 70; (1954) 93 CLR 418; (1955) ALR
14) and, second, that if a judgment obtained
against the defendant may ultimately be enforced
against the defendant's insurer then,
provided
all proper inquiries to find the defendant have
been unsuccessful, an order for substituted
service upon the insurer
may be made whether or
not the policy was entered into interstate.' I
do not understand the argument of counsel for the